Russia's experience in the 1990s was perhaps the most stark illustration of how nations fare with an unrestrained oligarchy, and how the pathology can be redressed simply and elegantly.
© Alex Krainer's Substack
This is part 2 of a 2-part report. Part 1 with the link to YouTube video covering both parts is at
this link.
Russia under oligarchsIn modern times, the full pathogenicity of oligarchic rule was exemplified in Russia during the 1990s.
When the Soviet Union collapsed in 1991, Russia began its transition from a communist dictatorship to a western-style democracy. But behind the façade of democracy, the real power was usurped by a small group of oligarchs, most powerful of whom was the Sembankirschina, the gang of seven bankers, all of whom were trustees of western financial interests. The seven and the companies they controlled were:
1. Boris Berezovsky - United Bank, Sibneft, ORT
2. Mikhail Khodorkovsky - Bank Menatep, Yukos
3. Mikhail Fridman - Alfa Group
4. Vladimir Vinogradov - Inkombank
5. Vladimir Gusinsky - Most Group, NTV
6. Vladimir Potanin - UNEXIM Bank
7. Alexander Smolensky - Bank Stolichny
© Alex Krainer's Substack
Behind the façade of democracy and her elected President
Boris Yeltsin, this group dominated Russia. Boris Berezovsky, whom in 1997
US News & World Report called "the most influential new capitalist tycoon in Russia," even bragged about his ability to appoint officials in the Yeltsin administration: "We hired Chubais. We invested huge sums of money. We guaranteed Yeltsin's [1996] election. Now we have the right to occupy government posts and use the fruits of our victory."
© Alex Krainer's SubstackL to R: Khodorkovsky, Gusinsky, Smolensky, Potanin, Vinogradov and Fridman instructing their President on how to run the country.
This was not just empty bravado. The way this "democracy" functioned behind the scenes was also described by the former Finance Minister,
Alexander Lifshitz[1]:
"I personally had the occasion to feel the power of the so-called oligarchs. In 1996 when I was appointed chief economic adviser, they summoned me. They asked me to explain how things stood. There were 8 or 9 people there... the meeting took place in one of the biggest banks. One of them told me, quite frankly, 'We brought Yeltsin to power, the country belongs to us and you'll do what we tell you to do.'
I asked, what is it you want from me? They gave me a list of demands which included consultation with them about all decisions, the appointment of ministry personnel only with their consent, etc, etc. I asked, what happens if I don't do as you say? They said, 'you'll no longer be a minister.'"
As in Rome, the effect of this system of governance was profoundly destructive. Public administration fell into disarray and law and order collapsed, along with the nation's economy. During the 1990s, Russia experienced what was the longest economic depression recorded anywhere during the 20th century. In all, her GDP fell by 50%, which was worse even than during the German invasion in World War II.
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